Amazon.com Inc. spent its first day as the owner of a brick-and-mortar grocery chain cutting prices at Whole Foods Market as much as 43 percent.

At the store on East 57th Street in Manhattan, organic fuji apples were marked down to $1.99 a pound from $3.49 a pound; organic avocados went to $1.99 each from $2.79; organic rotisserie chicken fell to $9.99 each from $13.99, and the price of some bananas was slashed to 49 cents per pound from 79 cents. The marked-down items had orange signs reading “Whole Foods + Amazon.” The signs listed the old price, the new price and “More to come…”.

“Price was the largest barrier to Whole Foods’ customers,” said Mark Baum, a senior vice president at the Food Marketing Institute, an industry group. “Amazon has demonstrated that it is willing to invest to dominate the categories that it decides to compete in. Food retailers of all sizes need to look really hard at their pricing strategies, and maybe find some funding sources to build a war chest.”

Simon Salamon, 60, a regular Whole Foods shopper, said the price drop brought him to the East 57th Street store.

“It reminded me why I shop at Amazon,” he said. “Ninety-nine percent of the time they have the best prices and their return policy is great. With the prices lower, I think we’re more likely to shop here every day.”

“Goodbye, Whole Foods as we know it,” Karen Short, an analyst at Barclays Capital Inc. in New York, said in a note. “The conventional supermarket has not evolved much in decades. But Amazon will likely drive drastically different shopping behavior in grocery. The survival of the fittest has begun.”

Food Fight

A food fight has begun. Walmart, Kroger, Jewel, and Costco will respond with “new lower prices” of their own.

Someone is bound to come up with a price guarantee such as the following: “Always lower than Whole Foods”.

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Remember that falling prices translate into falling profits for those all the way down the line, in this case back to farmers and their work crews. Bezos is just taking his Chinese supplied distribution empire and swinging it like a stick to pummel the life out of everyone in his way. What I see for the future is an unchecked conglomeration of Amazon, millions of Amazon workers in white suits scurrying around (at low wages) fufilling orders on cheap foreign made products, eating food from a central provider and living in tiny cubicles. Orwellian enough for you?!

Your widget example assumes I can increase sales to support lower profits. Just FYI, additional sales don’t greet me as I get up every morning, that takes additional manpower to hit the phones / street. What I would like are the days that I could make a decent profit on selling 1 widget, vs having to compete with products produced by ‘command and control’ Asian economies.

Mish,
What I don’t really understand is how anyone really thinks that the Whole Markets price cuts are going to even marginally affect those other grocers outside the PREMIUM price category.

Even AFTER the cuts the products where Amazon is price-cutting remain outrageously high compared to everyone else in the industry….such that only the upper crust is going to shop there anyway.

I used to cover Albertson’s and Costco for a regional brokerage a decade ago…and see NO customer base overlap with the Albertson’s/Krogers/Wal-Marts of the world….and ALMOST NO customer base overlap with Costco…despite the disposable income of Whole Foods and Costco customer bases being somewhat similar (upper middle-to-high). Costco customers shop there for price….Whole Foods customers shop there for the actual
(or perceived) higher quality of meat and produce, higher customer service, for status (to demonstrate environmental awareness).

Frankly, Publix has much more to worry about Whole Foods than Albertsons/Kroger/etc ….because they both are known for the higher customer service/high price point strategy.

Actually Whole Foods product line is still overpriced compared to other food retailers. You can buy similar products elsewhere at lower prices. The store is still a store for Yuppies with more money than sense, and so they don’t appear to care about the additional cents they are spending. They should be incensed, but they are not sensible.

economics rules in those places that you show contempt for Mike, those far places where the “Asians”, as you say, “command and control”.

Perhaps you should travel there and see how falling prices drive efficiency and quality and an improvement in lives over there. And although it they cause disruption here, it sets the stage for even more efficiency here.

What Amazon did is exactly economics working, disruption. Would you prefer we all use overpriced uncompetitive products made in North America. The market does not care where a product is made, people vote with their money. It actually creates more wealth being competitive.

You sound like an economics textbook. Have you ever run a business? Moreover, one that has had its bottom cut out by cheap Asian labor,& shitty ‘Free Trade’ policies? If you had, you might not be so dismissive of the ‘disruption’ you speak so lightly of.

I travel for both business and pleasure to many Asian countries including China, & I assure you that I’m quite aware of how industrialization has affected all concerned. As far as the Market ‘not caring where products come from’, I say rubbish. The offshoring of the industrial sector has allowed not only low prices, but unprecedented pollution and workers rights violations to become commonplace. You won’t believe it until you see it yourself. So I’d advise that you take your own advise, travel there and have a look for yourself…

100years ago, when Manchester was an industrial hub….it was pretty polluted, so were parts of Steel producing and up until recently so was Northern Alberta that produced oil from tar……all three changed…..

Same in India, where I have my ancestral home…..you visit, I was born in place like that…thematic changes take time…..

Almost never does anyone wish to go back to the past…..and disruptions cause pain.

Well I’ve been to India as well and the jaw dropping pollution is not just a little problem that will never be resolved by your reasoning of ‘it happened before’. Countries where there is little in the way of regulation, or where corruption is a way of life are free to produce goods with no regard to safety or toxicity of production. A civilized economy is what the West gave up when they bowed to the WalMartization of cheaply made crap made by slave labor. It’s a slide to the bottom, where standards that were the highest in the world are now meaningless. ‘Made in the USA’ used to mean something, now it’s a quaint relic of the past.

I fully agree. Just look at Uber. The so-called upper-class folks are getting into cars driven by drivers whose driving skills are not known, in cars whose reliability is not known, and not covered by any kind of insurance whatsoever. Of course, there is no price snobbery there, given such multiple layers of unreliability, but that has been neatly supplanted by Uber App tech snobbery.

Call me a snob, I don’t care, I just don’t want to wait in line. I shop at WFs mostly for that reason. If lower prices ends up meaning longer lines, I’m done with them.

My perspective is that I already pay the same for my groceries at WF as everybody else pays at Kroger or Safeway or Albertsons. WF prices are not more expensive. I just pay an additional surcharge so that I don’t have to deal with Kroger or Safeway or Albertson crowds.

When I shop at Costco, WMT or Pavilions, I spend about $ 200 each time. Would I have shopped at W(t)F the bill would have reached circa $ 260, easy. Then I spend about 15 minutes in line. My time spent in line is (was thanks to AMZN) worth ca. $ 240! And people get in debt for life to get a law degree that will pay them $ 100/hour!

They’ll no doubt automate most checkout experiences. Which makes running more registers in parallel much cheaper.

Some stores are even experimenting with doing away with a separate checkout step altogether. You just scan items with your phone as you pick them up, walk out waving your phone at the exit door when done, and payment is settled behind the scenes.

Have you tried a WF avocado? They aren’t garbage dinky ones. I purchased one at WF one time for $2.49 easily double or triple at walmart but the quality and size of it was well worth it. I usually buy them at Sprouts for $1.50-1.99 but the quality isn’t even half WF’s.

Lovely…but what if Whole Foods has to lay off staff to stay competitive… and all the other stores close… and consumers takes on more debt leveraged 100 because they now have spare income…and Amazingone cannot keep subsidizing low costs and raises prices higher than ever for his now captive audience… and all those now without income or unable to tolerate a price rise don’t have any option but to buy Amajunk ® “its as good as, ask the Chinese”… and the Chinese liquidate their reserves, buy out Iwasone and rename it Maozone… and reduce the content of a packet of Zappy Crisp Butter Twigs by 1% without adjusting the price…. do you think people will stand for that? I very much doubt it, which is why we are now offering a special deal on our product inflation buster package – pay for two now and we will keep one in FREE STORAGE for ten years and sell it back to you at the original price. Avoid cost rises and secure your Butter Twigs now, or its ciao chow Mao and back to crusts before you can say “The packet seems lighter, I knew I was getting stronger!”.

I’m not negative on it, but the question is are those prices long term realistic, how much service might be cut to support them, and where the positive if this is just a move to force other stores out of business before hiking prices again, maybe higher even, and create some monopoly in the process. Obviously people liked Whole Foods for what it was.. will it stay that way and increase its availability, or get messed up and just become a franchise of Amazon ideals.

I fully agree they won’t take a national monopoly, but they might take a monopoly in their field, as in a market dominance that is able to selectively strip out competion – aggressive marketing tactics are designed to do just that, and are widely used – to the point of diminishing consumer choice. Once games like that start it does move towards outright monopoly, government leverage, local influence etc.
There is nothing to say that in a hundred years Amazon will not be the official intermediary in all but local produce. There isn’t much you can say though except to watch for methods of unfair competition ( e.g. legislative corruption) , even those can be so well masked that people actually vote that bias in… does that make that legislation still corrupt then though?

The farmers….? Well, they will until they realize the low prices don’t support their operations – and they get leaner and meaner operations – or they try a different crop (if they can). Or they can sell their apple orchard to a developer for a gazillion bucks and retire, which will lower the apple crop, which WILL cause prices to go back up ….

{QUITE simplified economics case}

Show me some cases where government control of prices has worked. Bueller? Bueller????

Hate to inform you, but all that heavy construction equipment IS farm equipment. Typical farmer doesn’t sell out to a developer… he just puts in sewer and roads himself, and pays a surveyor to divide up the lots. Then he hires a builder to put up the homes IF the customer pays him a surcharge to do it.

Same guy who raises corn is perfectly capable of raising condos.

Anyhow, that’s what I’ve seen on the Eastern shore. Maybe it’s different somewhere else, and the farmers don’t know how to do stuff.

Food stamps do just that, but without a direct fix. So it is not a ginormous step to fix prices and promise subsidized access to all at that price. Seriously, when economies go haywire price fixing is one of the first steps governments consider. Whatever that price is, whether minimum or maximum, is irrelevant because afterwards you have no way to judge if it is high or low. In EU subsidy and quota limits have that effect, for example.

Well….we’re not the EU….and I don’t think anyone over here really wants to be. Socialism has taken root over there….and we’re TRYING to pour as much RoundUp and Weed-B-Gone on it as fast as we can.

If you can find a place where Socialism works well, lemme’ know. Not where everything is ‘free’, but rather where entrepreneurs who discover and invent and make things are rewarded – so the next generation continues to do the same.

Oh please…European Socialism is designed to keep the money flowing back toward the public good, with a focus on the welfare of the society as a whole. It may not always work as designed but nothing that complex ever does. If they hadn’t let millions of people into their cities who had no skin in the game, they’d be rolling along a lot better than they are now.

Agree, but then it took a hundred or more years to get to the current EU setup, and when I look at the US, it is on that path also in many ways, just fortunately quite a way “behind”. Just don’t feel bad criticizing EU, nor about the shortcomings of not being like EU, they aren’t worth exchanging for what you still have going well there.

Crys: Yes, we KNOW we’re ‘going that way’…..but MOST of us don’t like it. OBAMA! and his Legions (yes, Legions, like in the Biblical sense) are trying to take us there. Soros is helping alot of them. Can’t figure out how that guy is still walking the earth – after what he did to his own people for the Nazi’s….

Anyway – we’re trying to stop it. It’s tough fighting the good fight. But WE care – and we’re tough. Not cowards like Antifa who mask themselves – because they know their ass would be grass if we could see who they were….

“Free range” isn’t good for chickens. Chickens have been bred for egg laying ability and not for intelligence. They tend to group together and allowed to roam free, often injure each other. The worst case is they become cannibalistic, a behavior that spreads rapidly. With cages hens, an outbreak of cannibalism is confined to a single cage. In a “free” environment, you can lose a lot of chicken as they kill each other.

Cataluña – two independence party parties have officially pre-pledged their signature to the new Catalan statute that would proclaim a republic. This is hard to follow but the official Catalan referendum call has not been passed by the Catalan govern, nor the associated Republican constitution which would be passed either with the referendum call or just after an exit vote. The Catalan republican constitution is prepared, and its implementation in case of exit or government interference agreed on privately.. so the latest move is to make official that private agreement…without the new constitution actually being openly introduced. The next step is to officially call the referendum, at which point they will all be arrested most likely, and that will be in the coming weeks ( referendum is 1st Oct. so they may delay till right up close, or not). The republicans have made clear their intent, that they will only negotiate with Spain under a tri-partite that includes EU ( who are clearly involved behind the scenes, hard to imagine on the side of Spain frankly…at best out to pick the winner) for a minimal amount of time if independence is chosen.

In other words this is all going to get very real in the next few weeks and onwards.

Looked at the old and new prices. New prices are about the same as Kroger, Meijer’s, ect. Whole Foods was wildly out of line with their prices and they will bring them down to local pricing? No thanks… I prefer the touchy-feely before I buy. The Aldi’s chain is my pick with Kroger/Meijer/WallyMart a distant second. Maybe Little Jeffy is just getting too big for his CIA britches.

if one is stupid enough to pay extra (sometimes double?!?!) for “organic” products, you deserve to get taken advantage of.

There is no definition for “organic” — anything can be labeled such, regardless of how it was grown or produced. There is no FDA or other regulatory agency that recognizes the term.

Mass market chocolate chip cookies are 100% organic, whether you like it or not. So are Amish farm grown veggies (which are literally fertilized by feces). So are GMO veggies. So are the veggies at your local farm stand.

If you can eat it without dying, it is organic.

The price list shows the dumb-money shopped at Whole Paycheck

Congrats to the mathematically challenged!!! You are now paying 43% less for stuff that everyone else was, and still is, getting for 50% less. Thanks for playing

PS — If you join a farm CSA (or if you are willing to do the work to grow your own garden), you can get better veggies at much lower prices than the “discount” prices listed. Probably the sorts of people who frequent Whole Paycheck aren’t used to getting their hands dirty.

The basic premise of Amazon does not work in physical stores. Amazon – lowish prices, no physical contact with fellow shoppers, Whole Food – maybe low prices, normal physical contact with fellow shoppers. You pay more for food at Safeway for a reason, you choose who you shop with to some degree.

You must be going to the americanized asian markets. Koreans generally charge more. You need to go deep into the ethnic communities. Try the vietnamese fish stores. When I say $4.00 a pound – I mean whole salmon (head and all). The head makes good soup. I used to buy it for $1,99 a pound. The price doubled about a year ago.

I buy farmed Tilapia for $3.40 a pound. $2.50 when it’s on sale. I feed it to my dog. He loves it. It’s indistinguishable from eating sole. With over 70% of the earth’s surface covered with oceans it’s obscene what we have to pay for a pound of fish these days. Prices are gone ballistic.

Tilapia that is raised in tanks and processed properly isn’t mushy at all (primarily US producers). If you have mushy tilapia, it was frozen after rotting (I see this with Chinese imported frozen tilapia).

Tilapia (the good quality kind) holds together very well and is excellent for blackening or frying.

I believe a plant-based, or simply a low-carb, diet is the best cure for obesity and all the associated ills that go along with it, such as diabetes, hyperlipidemia, hypertension, etc, It has worked for me for over 20 years. My labs are gold star and flabbergast my MD. I told her that as long as I am eating low carb, the numbers look good, I look good, and I feel fit and healthy.

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